Five Star commenced operations in 1984, with a focus on consumer loans and vehicle finance. It shifted focus to micro, small and medium enterprises in urban and semi-urban markets in 2005.

The company provides loans to nearly 40,000 customers including single-shop retailers like vegetable vendors, provision stores, food retailers and self-employed individuals. It manages around Rs 1,220 crore in assets across more than 150 branches. The lender says it has a strong presence in the southern market, especially Tamil Nadu. It has also started operations in Madhya Pradesh and Maharashtra.

“For many years, small enterprises across India have struggled to gain access to traditional financial systems due to their inability to meet formal requirements for credit. In south India and across the country, demand for funding continues to significantly outpace supply,” said Puneet Bhatia, managing partner at TPG Capital Asia.

TPG’s investments

TPG, which was founded in 1992, has assets under management of around $84 billion globally across sectors including healthcare, financial services, manufacturing, retail and business process outsourcing.

The financial services sector is a key focus area for TPG in India and Asia.

In the non-banking segment, TPG has previously backed Janalakshmi Financial Services and Shriram Group. The target client base for both Janalakshmi and Shriram is similar to that of Five Star.